Moneycontrol Bureau
Punjab National Bank (PNB) missed street expectations on Tuesday with the third quarter net profit rising 2.5 percent year-on-year to Rs 774.6 crore. The profit was impacted by elevated provisions, slow growth in net interest income & operating profit and higher tax cost, but was helped by strong other income.
Net interest income remained almost flat at Rs 4,233 crore during October-December quarter compared to Rs 4,221 crore in same quarter last year. Net interest income is the difference between interest earned and interest expended.
A CNBC-TV18 poll had expected profit of the public sector lender at Rs 930 crore and net interest income at Rs 4,396 crore for the quarter.
Other income (non-interest income) jumped 37.5 percent year-on-year to Rs 1,290.8 crore and operating profit increased 1.8 percent to Rs 2,750.7 crore in the quarter ended December 2014.
Provisions for bad loans slipped 7.7 percent year-on-year (down 17 percent quarter-on-quarter) to Rs 1,467.8 crore with provision coverage ratio at 57.27 percent at the end of December quarter (versus 59.10 percent in September quarter).
Asset quality has worsened on sequential as well as yearly basis. Gross non-performing assets (NPA) as percentage of gross advances spiked 401 basis points Y-o-Y (up 32 bps Q-o-Q) to 5.97 percent during October-December quarter. Net NPA jumped 102 bps year-on-year (up 56 bps quarter-on-quarter) to 3.82 percent during the same period.
In absolute term, gross NPA climbed 33.8 percent on yearly basis (up 7 percent sequentially) to Rs 22,211 crore and net NPA grew 51.8 percent Y-o-Y (up 18.7 percent Q-o-Q) to Rs 13,788 crore in the quarter gone by.
Capital adequacy ratio (as per Basel III norms) dropped to 11.54 percent in the quarter ended December 2014 from 11.79 percnet in previous quarter but improved compared to 11.02 percent in the year-ago quarter.
Tax expenses surged 42.4 percent to Rs 508.40 crore from Rs 356.93 crore and total expenses increased 10 percent to Rs 10,154 crore from Rs 9,219.9 crore on year-on-year basis.
At 12:15 hours IST, the scrip of Punjab National Bank was quoting at Rs 181.25, down Rs 10.75, or 5.60 percent amid high volumes on the BSE.
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